With Just 6 Words, Fed Chair Kevin Warsh Demolished Expectations. "It's Hard to Believe," Says President Trump.

One big reaction Those six words essentially promised at least one rate hike before the end of 2026, and possibly more than one. Bank of America is now expecting three rate hikes before the end of the year. The markets reacted immediately, with the S&P 500 dropping 1.2% and the Nasdaq Composite falling 1.3%. When asked about the Fed holding interest rates steady, President Trump initially responded, "It's all right. Whatever." But when further pressed on the prospect of the Fed raising rates this year, Trump expressed disapproval. "I mean, it's hard to believe," he said. "It just keeps a country down." That might sound ominous for Warsh, but Trump went on to express confidence in his new pick, saying, "We have a very good guy over there now." Of course, Trump also initially praised former Fed Chair Jerome Powell, whom he nominated for the job in 2017. If and when the promised rate increase comes to pass -- which could occur as early as next month -- the markets and the president might not respond so favorably. However, with the markets now on notice thanks to Warsh, a single rate hike will have less of an impact on the market as a whole. What will have a major impact are Warsh's future statements about the potential need for multiple cuts. However, investors shouldn't panic and should remember that taming runaway inflation will help businesses in a number of sectors in the long run. Should you buy stock in S&P 500 Index right now? Before you buy stock in S&P 500 Index, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and S&P 500 Index wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $382,359!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,201,390!* Now, it's worth noting Stock Advisor's total average return is 883% — a market-crushing outperformance compared to 205% for the S&P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of June 27, 2026. John Bromels has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.